There is some interesting news about bridging loans in the press at the moment. In particular the West One Bridging Index is predicting that £2 Billion will have been lent in short term loans before the end of 2013.
Duncan Kreeger, director at West One Loans commented:
“Our £2 billion prediction for this year was labeled out of date when mortgage lending recovered slightly. Now it looks like an underestimate. That’s because of the different culture in the bridging industry – we’re not afraid of the projects that deserve real investment.
The UK bridging industry is expect to provide borrowers with a targeted £2 billion in short-term secured finance by the end of 2013, according to the latest West One Bridging Index. In the second quarter, industry gross bridging lending was £492 million, or an annualised rate of £1.97 billion. In the twelve months to June, gross bridging lending was £1.76 billion. Annual lending has grown by 9 per cent since the first quarter, and […]
So perhaps it’s appropriate to re-cap the Pros and cons of bridging loans
The Ftadviser notes that while bridging loans may charge an interest rate of as low as 0.75 per cent per month, Rob Jupp, incoming chairman of the Association of Bridging Professionals, warns penalty interest if the loan is not repaid on time is typically 3 per cent.
Alan Margolis, head of bridging at United Trust Bank, says
most short-term loans are in essence similar, but where they will usually vary is with regard to interest rates, fees and charges.
Prospective borrowers must make a realistic assessment of the cost and terms of any bridging facility and of the ability to settle it or refinance it within the agreed timescale… borrowers must still apply the same level of focus on the proposed terms as they would with other types of funding.
A Quick search on the internet for bridging loan providers will produce a very long and enthusiastic list of lenders and brokers. It is tempting to think that going direct to the lender is a cheaper option. Although this is not always the case, if you need specialist lending a broker may be best placed to find the right deal for you.